Guys. an Experienced trader is advicing me to stop getting in my own opinion . His strategy is simple.. by 3.45 pm each trading day, observe the trend . if Dow. +-20. dont do any thing. whenever it is + - 100 200 points go bull or bear. Continue this and keep booking profits while maintaing tight stops. any one heard of a similar strategy. monitoring market only at one period a day ?
Just pull up a chart real quick and have a look. Looking back over the past couple of weeks I see many occassions where it completly wouldn't have worked, and on the days it would have, you would have been stopped out by your tight stop.
Of course this makes sense. If there are more sellers than buyers so mkt is lower, at the end of the session day orders need to be completed. As far as a strategy to get in front of this, the only major flaw is that algorithims look for oversold conditions and supply and are set off in these conditions. One big one triggers others and a violent correction can ensue. This is one thing that makes trading so very difficult at present. Obviously this works in either direction.
1) 3:45pm?....New York Time? 2) Be "careful" during the first half-hour, lunch time and the final hour. 3) Be cognizant of news reports released during the trading session.
yup.. 345pm ET.. basically.. the finally 15 minutes of trading.. the trend of the day has been established.. usually u dont see a reversal. . If there is a reversal , it is firmly established by 330pm. itself.
I don't know Darwin, with market up 100 and all the order imbalances at 3.40 pm to buy, things are looking great - then a 4-6 handle selloff at 3.50pm in S+P. This seems to be more the norm than a continuation into the bell. One of the reasons this mkt is so tough to trade, is my observation at least every other day it seems.
Not at all. This is a simplistic way to look at things, especially devoid of any proof by observing a large number of days and see if this has any truth. And you also have to overcome trading costs which already puts you at a disadvantage.
yup.. i agree. making it simplistic.. does this have an edge.?. thats where your years of experience and tight risk management come into play.. trading costs.. another thing to worry about.. slippage.. thanks to Interactive Brokers.. , I have that in control.. but never the less it does add up..
I have heard of this being used quite successfully by some traders. As for me I am not as regimented or time concious.